HubSpot Jumps into the CRM Marketplace

Hell probably didn’t freeze over today but there might have been a light frost: after years of rejecting the option, HubSpot today announced it will offer a CRM system.

The news was the climax of the founders’ keynote at the company’s annual Inbound Conference, which has yet again doubled to reach 10,000 attendees. Audience response was predictably enthusiastic, since CRM features have been much desired by HubSpot users and resellers for years. The system itself offers standard CRM features – contacts and company records, calendar management, emails, activity logging, tasks, deal tracking – combined with automated population of company and prospect information from Web sources and Twitter activity. There’s also a neat feature that finds existing relationships between a company and email accounts within the user’s own address book and other address books (presumably of co-workers) who have granted access. Another feature goes a step further and provides finds data on other companies that are similar to a current prospect. The goal of all these features is to find useful relationships and information while minimizing manual research and data entry by sales reps. HubSpot hopes this will encourage adoption of CRM by sales reps who have rejected it because it took too much work for too little value.

The product looked quite nice, although I think most of the features are already available in other CRM systems or add-ons. Having them easily available in a single product is convenient, but what’s really interesting is the integration of CRM with HubSpot’s marketing features and underlying database. This provides a combined sales and marketing system that’s quite unusual for mid-market companies. The approach is standard in systems for very small businesses, such as Infusionsoft and Ontraport. But that’s a different market, and one which HubSpot managers make clear they don’t want to target (although I’m sure HubSpot has many such businesses in its current customer base).

Even more unusual for the mid-market, HubSpot is offering the system for free: initially to its current customers, and to the rest of the world some time next year. The free version will have some limits, likely related to features and database size, although the company hasn’t decided on the details. This follows the model of HubSpot’s current sales enablement system, Signals, which provided some behavior tracking and itself is being expanded and renamed Sidekick. HubSpot said it already has 100,000 Signals users, who greatly outnumber the 11,500 customers of its flagship marketing system.

The business strategy behind the new system is fascinating if you’re interested in that sort of thing. It’s a continuation of HubSpot’s transition from a purely marketer-focused focused company (remember that started as a tool to attract search traffic) to one that serves all customer-facing departments. This gives it access to the CRM market, which is much larger than marketing automation and would get even bigger if HubSpot succeeds where existing mid-market CRMs have failed. For a company that wants to keep growing, movement from marketing into the adjacent CRM space is probably irresistible. Can a HubSpot service offering be far behind?

Of course, there’s an obvious risk of HubSpot losing focus as it shifts to serving a broader range of users. But the alternative is being stuck in a marketing system space that is itself adding new requirements well beyond the current standard marketing automation features, such as integration with paid advertising and Web experience management. It might soon be easier to stay competitive with other CRM systems than to meet the full needs of omni-channel, integrated marketers.

It’s hard to imagine HubSpot actually abandoning its marketing users, but that might be an option that company’s managers are keeping open by developing a new base in the CRM industry. The analogy that HubSpot leaders used more than once was Apple creating the iPod as a separate business serving a much larger audience than the MacIntosh computer. Their intent seems to be that the broader business would introduce the brand to new companies who would then buy the original product. But it has surely occurred to them that if the new business is hugely successful then it will be much less painful should the original business shrivel away.

David Raab is a consultant specializing in marketing technology and analysis. Clients have included major firms in financial services, retail, communications, and other industries. His B2B Marketing Automation Vendor Selection Tool provides detailed information and guidance to buyers of marketing systems. Mr. Raab has written hundreds of articles for DM Review, DM News and other industry publications. Many of these are available without charge at www.archive.raabassociatesinc.com.

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[03/28/2019]
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